By Michael Koziol and Mark Kenny

Prime Minister Malcolm Turnbull has labelled Peter Dutton "outstanding" after his Immigration Minister drew fire for claiming an expanded humanitarian intake of refugees would see many "illiterate and innumerate" refugees living on welfare, and benefiting from Medicare while also taking Australian jobs.

The comments, seen by many in the community as a cynical attempt by the Coalition to ramp up public anxiety about boat arrivals given Labor's attempt to mirror its border protection policies, touched off a storm with both left-of-centre parties condemning the government in the strongest terms.

Paul Power, from the Refugee Council of Australia said the suggestion of refugees simultaneously taking jobs while also being "illiterate and innumerate" was nonsense.

"Mr Dutton's comments are not only incoherent, they contravene the evidence substantiated by the contributions of hundreds of thousands of refugees who have contributed to our country," he said, while describing humanitarian migrants as "a politically defenceless section of Australian society".

"The fact that this political attack is coming from the minister responsible for Australia's refugee program makes it even more offensive."

Dubbing Mr Dutton "an outstanding Immigration Minister", the Prime Minister said Australia was one of the most generous countries in the world when it came to refugee resettlement and took its responsibilities seriously.

Prime Minister Malcolm Turnbull has changed tack.Credit:Andrew Meares

But he sought to put Mr Dutton's comments into context by explaining that large numbers of refugees came from war-torn countries, and that this was to be met with compassion, not intolerance.

"Large percentages of them have no English skills at all, many of them are illiterate in their own language, many of them have not completed high school," Mr Turnbull said.

Immigration Minister Peter Dutton.Credit:Alex Ellinghausen

"That's no fault of theirs. That's why we're reaching out to help them with compassion. That is not a basis for criticising them.

"What it is, as Peter [Dutton] has identified, is a basis for us taking our responsibility seriously and ensuring that we take into Australia the number of refugees that we can effectively settle."

Illustration Ron Tandberg

These people would be taking Australian jobs, there's no question about that, and for many of them that would be unemployed, they would languish in unemployment queues and on Medicare and the rest of it.

Peter Dutton

Unlike many other countries, Australia invested hundreds of millions of dollars in refugee settlement and support services, the Prime Minister said. "Many countries in the world accept many refugees into their countries and effectively forget them. We don't."

Mr Turnbull said Labor's intention to double the annual humanitarian intake of refugees would come with a price tag, likely in the billions of dollars, that the opposition had not costed. "Labor's approach to immigration is one of gesture politics," he said.

Then on Tuesday night, Mr Dutton told Sky News many refugees were not literate or numerate. "These people would be taking Australian jobs, there's no question about that, and for many of them that would be unemployed, they would languish in unemployment queues and on Medicare and the rest of it," he said.

Labor, the Greens and refugee advocates have branded those remarks offensive and incorrect. Opposition Leader Bill Shorten said they were comments that One Nation leader Pauline Hanson "would be proud to make".

Asked whether he would want a divisive border protection debate to run through the election campaign, Mr Turnbull repeated sentiments he expressed on Tuesday that "border protection and immigration are and always have been key political issues".

However, when asked directly, he would not repeat or echo Mr Dutton's suggestion that refugees "would be taking Australian jobs".

The local Liberal MP Ewen Jones, who accompanied the PM on his visit to the Port of Townsville, said he was "rock solid with Peter Dutton" but had not seen a transcript of the minister's interview.

"The reason we have such a great humanitarian program is because we run it well," Mr Jones said. "It's not us who's politicising it, it's Labor candidates."

The Townsville MP said asylum seekers remained a "massive issue" in his electorate. But he did not share the views of Nationals MP George Christensen – who also accompanied the Prime Minister on Wednesday – who wrote to the government with concerns about Syrian refugees being settled in his neighbouring electorate of Dawson.

"No I don't [agree]," Mr Jones said. "What we have to do is make sure that they are given every chance when they come here."